Quote of the Day
It is only by following your deepest instinctthat you can lead a rich life,
and if you let your fear of consequence prevent you from following your deepest instinct,
then your life will be safe, expedient and thin.
Katharine Butler Hathaway
Guest Quotation of the Day
I must admit, I learned a lot from reading Piketty’s book. Specifically, I learned how many self-styled progressives today are willing to sacrifice the standard of living of billions of poor people, in order to prevent a few people from becoming really rich. -Bob Murphy via Carpe DiemPro-Liberty Thought of the Day
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| Via IPI |
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| Via IPI No wonder why so many dead people vote in Illinois! |
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| via USA Today |
I'm not going to repeat the issues of the morally unconscionable prohibition of market-clearing wages for lower-skilled/entry-level jobs. For businesses that barely scrape by, particularly smaller businesses, already operating on small margins and depending on lower-wage employees, it could be a death sentence: part of the problem with these jobs is that it's very hard to raise their productivity enough to justify higher wages. Assuming an average work-year of 2000 hours, this means about $30K a year--good pay for menial work--if you can get it, and that's the rub. First of all, only a small percentage of workers make minimum wage; if you can't find a minimum-wage job in the status quo, you certainly won't if the wage is increased over 60%.
We already see more automation in the notorious fast-food industry. One of the commenters in the relevant We the Individuals post pointed to the following company's blurb:
Fast food doesn’t have to have a negative connotation anymore. With our technology, a restaurant can offer gourmet quality burgers at fast food prices.Our alpha machine frees up all of the hamburger line cooks in a restaurant.It does everything employees can do except better...The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better. We will launch the first restaurant chain that profitably sells gourmet hamburgers at fast food prices.Our current device can pay for itself in less than one year, making equipment sales a second path for us.They claim their next-generation product will allow custom meat blends, and their technology can also be applied to food trucks, convenience stores, and vending operations. Is this just hype? But as a former business school professor, one of the issues we've seen is the difficulty of scientifically managing variety in scale. Even if we leave the world of burgers, imagine if a fast food place could deliver on the concept of omelettes to order--your pick of ingredients, cheese, regular or free-range eggs. Imagine being able to order individual slices of any combination of pizza toppings, crusts, etc. Soups. This creates a whole new level of fast-food concept, customizable vs mass produced.
(The worst cup of coffee I ever had was at a McDonald's in Orlando years back; it was inky black, like it had been on the burner for hours--I guess they didn't want to make a new pot. When I headed back to UH from my folks one weekend, I stopped at a Burger King and as a treat, ordered my meal with onion rings. I hadn't had onion rings for a while, but I'm pretty sure they weren't supposed to be cold and stale with dough remnants... I still feel guilty about promising my then 2 or 3-year-old nephew McDonald's french fries, only to find out "we're not serving our lunch menu yet...; how about hash browns?" Yeah, right, lady... My first Eagle Scout nephew is now grown-up and laughs over my confessed remorse...)
The Stock Market, the Fed, Etc.
Late last week I was talking about uneasy signs of speculation in the stock market. A guest Gray Lady post over the weekend made similar points:
As a result of forgetting our most recent investing pain in 2008-9, we see things like:It looks like ECB chief Mario Draghi is going to repeat the madness of Fed easing, now that inflation measures are below the target 2%, and some investors are hoping that the European market will explode upwards to capture US-like earnings multiples. I'm not sure that will happen, because further easing is probably already baked into market pricing. As bad as our regulation and labor policies are, they are even worse in Europe, and Europe's pension tsuanami is perhaps even worse than ours. I do think there are long-term investments to make, say, in the devasted PIIGS market. Maybe an easing perks up European stocks somewhat, but I need to see more of a growth story coming out of Europe. Famous last words. I will say part of my retirement portfolio is diversified internationally, but I prefer to look to mutual funds or ETF's than individual companies.
· Serious interest in penny stocks
· Retail investors setting new trading records
· Greece issuing bonds worth 3 billion euros with yields of just 4.95 percent — and investors buying it all
· People saying REITs and utilities are substitutes for bonds
· Volatility hitting almost historic lows, with the Volatility Index (VIX) dropping to 11.36 in May
· Housing in expensive areas selling like crazy
Then, there are the advisers who are trying to convince clients to get back into stocks even though many indexes posted enormous gains in 2013.
I did notice on the Google Finance page some speculation on the Fed; one of the pieces says Fisher, a rare Fed (inflation) hawk, hopes to see the taper completed by the fall but doesn't see raising rates until next year. Tobey, a Forbes contributor, tries to steer a middle way between lip service to the necessity of the Fed, which I don't concede, and the virtues of having a normal market without the Fed's thumb on the scale. The strongest points he makes are the uncertainty caused by not knowing when the Fed's rigged pricing will end and malinvestments motivated by rigged low rates could result in massive losses of principal if and when the market corrects. I do think the things that have depended on cheap money, like mortgages, will be adversely affected by rising rates, but I don't look for a collapse short of going well above historical rates. I'm also worried about rising rates on bond prices, especially junk bonds investors have bought into hoping for higher yield (I pulled out my own small stake in a junk bond fund several months back). My chief worry is what I wrote in my prior commentary: I think that whatever the Fed does will be too much, too little, too late; I expect volatility if and when the Fed stops this madness, and what I fear most is that the Fed will overreact to the volatility and make things even worse. The Fed needs to stop all its manipulations now and be patient as the real market gets its legs...
Facebook Corner
(Reason). "Most transparent administration in history"
I think the matter of a POW exchange falls well within Obama's role as Commander-in-Chief; the whole purpose for having a Commander in Chief is to address and act on imminent issues such as the medically indisputable poor health of Sgt. Bowe Bergdahl. Of course, demagogues are going to politically exploit the unpopularity of "negotiating with terrorists". I have no doubt that the military will hold Bergdahl responsible for any deviations from policy regarding the circumstances of his capture, but I will note that Israel, hardly soft on terrorism, has negotiated prisoner exchanges in the past.
(Catholics for a Free Market). Apparently, economies which feature massive collusion between the state and powerful corporations is a "free market".Can we have Jeffrey Tucker, Randy England, and Thomas E. Woods Jr. spend a week schooling this man?
I don't think you should pay lip service to the leftist nut jobs whom dream up crackpot corporate conspiracies. There are two things which attract the minority of parasitic capitalists to Big Government: power and money. The way you control for corruption is to limit the size and scope of government, period.
Don't fall for the propaganda of the vice Politics of Envy. The consumer decides winners and losers in the marketplace. If large corporations can improve my standard of living with better variety and prices of goods and services, I don't mind their earning a decent profit, and only God stands in judgment of what is 'decent'; what I do know is outsized gains attract competitors in the marketplace.
The pontiff and the similarly economically illiterate Cardinal Oscar Rodriguez Maradiaga, when they copy and paste leftist propaganda, are not only intellectually dishonest but in a state of denial of the fact that capitalism has done more to lifting people out of poverty than any other force in human history, including the Catholic Church. Anything they do to undermine capitalism is a violation of God's trust. Jesus rejected a political mandate on earth; He had wealthy benefactors. Wasn't it Judas who scolded the woman for anointing Christ's feet with expensive oil rather than giving to the poor? So now we have the Pope and Maradiaga siding with Judas, instead of Christ? Pathetic!
(Drudge Report). DID OBAMA SAVE A RAT? UNBELIEVABLE: Never Listed By Pentagon As POW http://bit.ly/1kobzxt
And you're surprised that the Pentagon, which has never survived an audit, would screw up here? What's your point? That incompetent bureaucrats bungled paperwork? Who would have ever guessed after the Arizona VA Hospital kerfuffle?
(Reason). Just when you thought it couldn't get any worse...Obama Just Found a Way to Make College Even More Expensive
This is exactly the kind of nonsense which happens when you nationalize college loans. Not only do you have a trillion-dollar plus bubble, much of which will never be paid off, but crony colleges will soak up every penny of that loan money they get. In the meanwhile, spendthift pieces of work like Elizabeth Warren want us to subsidize the risks of underwriting unmarketable degrees in the arts, foreign languages, etc., up to 6-figure sums. The risks include students never even finishing their dubious degrees in the first place, oversupplies of lawyers, etc. It's time to stop the madness of subsidizing the mismatch between universities and the economy, of granting loans to students whom don't belong in college in the first place, of funding education out of line with prospective employment prospects. While the Obama Administration with its thugs aim their sights at the "real problem" (for-profit institutions), we need to stop the madness of the corrupt government-college relationship. And I'm writing as a former college professor...
(Reason). Seattle passes unprecedented initiative to increase number of 18-34 year-olds still living with their parents. [i.e., minimum wage hike]
I routinely tell recruiters from Washington state to go away; the economic illiteracy in Seattle just confirms my suspicions.
(Drudge Report). Should the deal [for the Taliban-held American GI] have been made? You can't have it both ways. Yes or No?
YES. We should not sacrifice the lives of POW's to accommodate some political whore's talking points. It's time for America to stop meddling in the affairs of other nations; our people and tax money are better utilized elsewhere.
Proposals
Political Cartoon
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| Courtesy of Michael Ramirez via Townhall |
Rolling Stones, "Paint It Black"
